LJN Blog Posts

Oh dear, only a day or so in and the tories are up to their old tricks.Just as they did in the '80's by raising the hateful tax, VAT, from 8% to 15% then to 17.5%, they now appear set to raise VAT to 20%.During the credit crisis, Labour lowered VAT to the lowest level allowed under European regulations 15%, until the worst of the crisis was over. However the tories revert to type, and seek to raise it to try and wreck our industry yet again.When the tories put up VAT on plants up from 8% to 15% this had a dramatic affect on plant sales, and I'm sure raising the rate to 20% this will have a similar impact.This draconian measure will also badly hit those many Landscapers and Designers that are not VAT registered, not only in plant costs, but also materials, and of course, fuel.If you are VAT registered, you can of course charge your client accordingly, and put up your prices. Just tell them it's not extra profit for you, it's the Con-Dem stealth tax, and you are just their unpaid tax collector.So the Eton mess begins...

VAT really is a stealth tax, as most people do not realise when they are paying it. For example most people understand that VAT is not on food, yet, but when they visit their supermarket they are still paying VAT on many items.

VAT is a regressive tax its' burden falls more heavily on those with low or fixed incomes that have little surplus cash. Hopefully there will be some mitigation with a rise in personal allowances but if you are already below the tax threshold it will make little if any difference.
I have beleived that income tax is a fairer way of collecting tax than VAT you only pay if you are earning the money to pay it.

Hmmmm. So how do you think this large budget deficit is going to be paid back if it's not through taxation? Just for fun let's look at the tax increases that LABOUR introduced between 1997 and 2006 alone....
You'll no doubt notice that a few of these stung business owners like - oh, you and me.

27. Upper earnings limit for National Insurance contributions raised above inflation
28. National Insurance for self-employed people raised
29. Married couple's allowance abolished from 2000 for under-65s
30. Mortgage interest relief abolished from April 2000, increasing typical bill for average homeowner by £240-a-year
31. New rules to stop contractors in IT industry setting up firms to reduce their tax bills
32. High mileage discount for company cars cut
33. Tobacco duty escalator brought forward
34. Insurance premium tax up from one to five per cent
35. Vocational training relief abolished
36. Employer's National Insurance contributions extended to all benefits-in-kind
37. VAT on some banking services increased
38. Premiums paid to tenants by landlords taxed
39. Duty on minor oils, such as fuel oil, up
40. Vehicle excise duties for lorries up
41. Landfill tax escalator introduced
42. Stamp duty on properties increased again
43. Council tax up by 6.7 per cent for average bill on Band D property to £798

2000

44. Tobacco duties up by five per cent above inflation
45. Stamp duty on properties increased again
46. Extra taxation of life assurance companies
47. Rules extended on companies using foreign subsidiaries to shelter profits in low tax regime
48. Council tax up by 6.1 per cent for average bill on Band D property to £847
2001

49. Council tax up by 6.4 per cent for average bill on Band D property to £901

2002

50. Personal allowances for everybody under the age of 65 frozen
51. National Insurance rate to rise from 10 per cent to 11 per cent from April 2003
52. New NI band for higher earners
53. National Insurance for employers rises from 11 per cent to 12 per cent
54. Self-employed also rises by 1 per cent
55. North Sea taxation up
56. Tax on some alcoholic drinks up
57. New stamp duty regime aimed at stamping out tax avoidance
58. New rules on loan relationships
59. Council tax up by 8.2 per cent for average bill on Band D property to £976
2003

60. VAT on electronically supplied services
61. IR35 applied to domestic workers to stop families from reducing tax bills on nannies
62. Betting duty change
63. Tax on red diesel and fuel oil up
64. Rules extended on companies using foreign subsidiaries to shelter profits in low tax regime extended to Ireland
65. Vehicle excise duty up by £5 on cars and vans
66. Council tax up by 12.9 per cent for average bill on Band D property to £1,102
2004

67. New 19 per cent tax rate for owner-managed businesses
68. Six-fold increase in the amount of tax paid by tradesmen for using their vans outside working hours. For basic rate tax-paters, an annual rise of £110 to £660
69. UK transfer pricing introduced, substantially increasing red tape on British firms
70. Increase in rate of tax on discretionary trusts becomes 40 per cent
71. Increase in tax on red diesel fuel
72. Increase in tax on red diesel fuels, including LPG (liquid petroleum gas)
73. Council tax up by 5.9 per cent for average bill on Band D property to £1,167
2005

74. Cancellation of stamp duty land tax relief on disadvantaged areas
75. Tax on North Sea oil firms doubled from 10 per cent to 20 per cent
75. Tax on North Sea oil firms doubled from 10 per cent to 20 per cent
76. 0 per cent rate of corporation tax abolished which had been introduced by Mr Brown to encourage small businesses
77. Council tax up by 4.1 per cent for average bill on Band D property to £1,214

2006

78. Clampdown on trusts and insurance policies commonly used to cut future inheritance bills
79. Increase of £45 in vehicle excise duty for gas-guzzling 4x4s cars
80. Council tax up by 4.5 per cent for average bill on Band D property to £1,268

It's not like it's a surprise. It was actually Labour's long-term plan to raise tax once the immediate crisis was over. Like Dave and Paul say - it's got to come from somewhere. If you really want to direct your anger it should be at the upper management of the banks who caused all this, all in aid of lining their own pockets.

I think that something has to be done to curb the debt and something radical has to be done sooner rather than later.

VAT is the easiest way to do this as I can't see either Nick or Dave taking free bus travel of pensioners to reduce the burden.

It always amazes me that there is VAT on plants and seeds, when the government bleet on about reducing CO2 emmissions and plants are one of the most simple ways to do so. i.e they are taxing reducing our carbon footprint.

vat is a regresive tax it takes money from your pocket as this artical says http://www.heraldscotland.com/comment/herald-view/raising-vat-would....
we need to find money to pay back the national debt,heres an idea lets start asking for it back from the banks we bailed out ,no more bonus payments until the debt is cleared increase tax on them ,as for the we will leave if we carnt have it our way brigade,well f*ck right of then, give us your pasport and dont trade here again.
The long and short of it is we are all going to be paying more tax but there are lots of people who will avoid this, not the poor or middle class but the usual list of tax dodging super rich non doms and corporations who will riggle out of this, as ever the legislation to stop this will not be worth a red piss to thease guys

Probably the most sensible thing is wait until we get the budget, then moan about it.
An increase in VAT will hurt those on low incomes, increases in employers NI contributions increase the cost of employing full time staff. Large retailers avoid this by taking on large numbers of part time staff instead of fewer full time staff. This means that the part time staff in order to make ends meet have to claim tax credits to top up their earnings, in effect we the tax payers are not only bailing out the banks but subsidising the likes of Tescos.
I would like to see the budget stamp out this anomally for large companies.

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